German economy expected to stagnate in first quarter during lockdown

Publish January 21, 2021
finance & economy

The German economy is expected to stagnate in the first quarter due to the extension of the lockdown to mid-February, the ifo economic research institute said on Wednesday.
“Every week the lockdown is extended results in direct losses in turnover, production and value added,” ifo economy chief Timo Wollmershaeuser said.
Directly impacted services were likely to see a decline in value added similar to that in spring 2020, Wollmershaeuser said.
Meanwhile, manufacturing and services close to manufacturing would continue growing in the first quarter, Wollmershaeuser estimated.
If the measures are reversed in March the latest, economic output would grow and recover these losses, Wollmershaeuser said.
Economic output dropped by 5 per cent in 2020 compared to the previous year, according to estimates by the Federal Statistical Office.
In the fourth quarter, gross domestic product (GDP) did not decline despite the lockdown, government statisticians found in an initial estimate.
Meanwhile, Volkswagen expects “substantial growth” in China this year, the German auto giant’s head of operations in the country said on Wednesday.
“There are good reasons that the VW Group can do better than the whole market,” Stephan Woellenstein said in Beijing.
“We see positive momentum,” he added. Nearly one in five new cars sold in China today comes from the Volkswagen Group.


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